An expansionary fiscal policy is likely to
A) increase borrowing by the Treasury through the sale of bonds.
B) decrease borrowing by the Treasury through the purchase of bonds.
C) increase borrowing by the Treasury through the purchase of bonds.
D) decrease borrowing by the Treasury through the sale of bonds.
Ans: A) increase borrowing by the Treasury through the sale of bonds.
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Expansionary fiscal policy in response to a negative real shock:
A. will only increase real growth and inflation a little. B. might increase inflation a little but will increase real growth a lot. C. might increase real growth a little but will increase inflation a lot. D. will increase both real growth and inflation a lot
An external cost is a cost of producing a good or service that is
A) not paid by the producers. B) paid by the producers. C) paid by the government. D) paid by the consumer and the government.